Dubai-listed Shuaa Capital, a leading investment and financial services company in the region, is likely to hold its former largest shareholder and its auditors accountable for discrepancies identified in the company’s 2023 financial statements.
The news comes after Shuaa disclosed significant errors in its 2023 financial reporting, prompting an investigation by the company’s board of directors. The investigation revealed that certain accounting practices by the former majority shareholder, which has since significantly reduced its stake in Shuaa, did not comply with accounting standards. Additionally, the company’s auditors, who are responsible for verifying the accuracy of financial statements, are also being scrutinized for potentially overlooking these discrepancies during their audit process.
Shuaa has not publicly identified its former largest shareholder, but has confirmed that the individual or entity is no longer a major stakeholder in the company. The company has also chosen not to disclose the specific nature of the accounting irregularities, but has assured investors that the errors have been rectified in its most recent financial statements.
Shuaa’s decision to pursue accountability for the 2023 discrepancies reflects the company’s commitment to transparency and adherence to corporate governance best practices. Holding both the former shareholder and the auditors responsible sends a strong message that such financial reporting irregularities will not be tolerated. The company’s pursuit of legal action is likely to be closely monitored by investors and regulators in the region, with the potential to set a precedent for future corporate governance cases.
While the specifics of the case remain undisclosed, it is believed to be one of the first instances in the UAE where a listed company is holding its former major shareholder and auditors accountable for financial reporting errors. This unprecedented action could have significant implications for the financial services sector in the region, prompting stricter scrutiny of accounting practices and potentially leading to increased investor confidence.
Shuaa’s legal team is currently evaluating its options for holding the former shareholder and auditors liable. The company has not ruled out the possibility of filing lawsuits against both parties to recover any financial losses incurred as a result of the accounting errors. The outcome of this case is likely to be watched with keen interest by stakeholders across the UAE’s financial sector.
